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Smart Summary

District Consumer Disputes Redressal Forum, Jalandhar — Summary of Opinion

Complaint No.: 214 of 2017 | Date of Institution: 10.07.2017 | Date of Decision: 04.03.2020

Complainant: Surinder Pal

Opposite Parties: Syndicate Bank (OPs No.1 & 2) and HDFC Bank Ltd. (OPs No.3 & 4)

Bench: Karnail Singh (President) and Smt. Jyotsna (Member)

Factual and Procedural Background

The complainant, Surinder Pal, a Head Constable in the Punjab Police, availed a loan of Rs.6,90,000 from Syndicate Bank (OPs No.1 & 2) with monthly installments fixed at Rs.10,150. After an accident, he requested that Syndicate Bank recover installments by ECS from his salary account (No.13391050026074) maintained with HDFC Bank (OPs No.3 & 4). He believed installments were being deducted and credited to his loan account.

On 02.01.2017 Syndicate Bank served a notice under the SARFAESI Act stating the complainant's loan account was classified as Non-Performing Asset w.e.f. 29.09.2016. Upon obtaining his statement from HDFC Bank, the complainant discovered multiple debits labeled as "Return Charges" (Rs.862.50 per entry) and an alleged deduction of his entire salary on 08.02.2017. He claimed total illegal deductions amounting to Rs.2,51,188 (as alleged in the complaint), sought refund, interest, compensation of Rs.50,000 and litigation expenses of Rs.15,000.

OPs No.1 & 2 and OPs No.3 & 4 filed written replies denying liability and raising preliminary objections (including lack of jurisdiction, limitation and absence of negligence/deficiency). Evidence was exchanged: affidavits and documents from the complainant (Ex.CA, Ex.C-1 to Ex.C-10, Ex.CW2) and from the OPs (Ex.OP1&2/A with Ex.O-1 to Ex.O-4; Ex.OP3&4/A). Replications were not filed. The Forum heard arguments and delivered its order on 04.03.2020.

Legal Issues Presented

  1. Whether the complaint is maintainable before the Forum and whether OPs No.1 & 2's objections as to jurisdiction and limitation are sustainable.
  2. Whether OPs No.1 & 2 (the loanee bank) are liable for the alleged non-receipt of ECS instalments and/or for declaring the loan account NPA.
  3. Whether OPs No.3 & 4 (the salary account bank) were negligent or guilty of deficiency in service by failing to effect ECS transfers despite sufficient balance and by debiting "Return Charges".
  4. If liability is established, what monetary reliefs (refund, interest, compensation, litigation expenses) are appropriate and against which OPs.

Arguments of the Parties

Complainant's Arguments

  • He had authorized ECS recovery of EMIs from his HDFC salary account and believed installments were being debited and credited to his loan account at Syndicate Bank.
  • He received a SARFAESI notice and discovered, on obtaining account statements, that HDFC had charged repeated debits (Rs.862.50 each) since October 2016 and on 08.02.2017 had deducted his entire salary; he alleged illegal deductions totaling Rs.2,51,188.
  • Sought refund of the amount deducted, interest at 12% p.a., compensation (Rs.50,000) for mental agony and harassment, and litigation expenses (Rs.15,000).

OPs No.1 & 2 (Syndicate Bank) — Arguments

  • Preliminary objections: the complaint is not maintainable against them, the Forum lacks jurisdiction and the complaint is time-barred; the complainant is not a consumer as defined.
  • On merits: admitted loan and EMI amount but denied that cash deposits were made regularly; stated that Syndicate Bank had sent ECS request to HDFC but never received installment amounts; maintained the complainant repeatedly failed to keep sufficient balance causing ECS failures; contended there was no negligence or deficiency on their part and sought dismissal of the complaint.

OPs No.3 & 4 (HDFC Bank) — Arguments

  • Preliminary objections: complaint not maintainable as there was no deficiency or negligence; alleged complainant had not approached with clean hands and had withheld or distorted facts.
  • Admitted the complainant maintained a salary account and that ECS recovery requests were received; stated ECS charge per transaction was Rs.862.50 and such debits are made by the bank's system automatically when a transaction is attempted.
  • Denied that charges were intended to usurp funds or make illegal gains; contended that ECS transactions and debits were made as per liabilities and that the complainant was responsible for his account conduct; prayed for dismissal.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Forum conducted a fact-based comparison between the parties' pleadings and the documentary evidence (notably the complainant's account statement Ex.C-10 and the ECS request Ex.O-3).

  1. Jurisdiction and Limitation Objections (OPs No.1 & 2): The Forum found that the Syndicate Bank's counsel failed to satisfactorily demonstrate how the Forum lacked jurisdiction or that the complaint was time-barred. Consequently, those preliminary objections were rejected as unsustainable.
  2. Liability of OPs No.1 & 2 (Syndicate Bank): OPs No.1 & 2 contended that despite sending ECS requests to HDFC, no instalment amounts were received and that the complainant repeatedly failed to maintain sufficient balance. The Forum compared this position with the HDFC statement Ex.C-10 and observed no ECS credits for October 2016 to March 2017. Given the absence of transferred amounts, and the complainant's apparent long default, the Forum concluded there was no fault on the part of Syndicate Bank in declaring the account NPA. Thus, OPs No.1 & 2 were held not liable for negligence or deficiency in service.
  3. Liability of OPs No.3 & 4 (HDFC Bank): The Forum accepted that an ECS authorization/request by the complainant existed on file (Ex.O-3). The court reviewed the HDFC statement and found successive entries where the bank debited and then credited amounts, and a pattern of debits labeled "Return Charges" of Rs.862.50 per entry. The Forum recorded the following factual findings from the statement:
    • Sufficient salary credits were present in the account in October 2016 through February 2017 (specific salary credits recorded on 03.11.2016, 02.12.2016, 02.01.2017 and 02.02.2017).
    • Between October 2016 and February 2017 there were 75 entries of Rs.862.50 labeled as Return Charges (the opinion enumerates entries across months and calculates a total deducted amount of Rs.64,650/- under that head).
    • Despite sufficient balance, the HDFC Bank did not effect ECS transfers to the loanee bank and repeatedly imposed return charges. The Forum reasoned that if an ECS transaction was not successful, the bank was not entitled to levy such transaction/return charges repeatedly; conversely, if the transaction succeeded, a transaction charge may be due. The observed pattern led the Forum to conclude that HDFC Bank wrongly and illegally debited the stated amount and failed in its duty to make transfers when balance was available.
  4. Conclusion of Analysis: Based on documentary evidence and the observed entries, the Forum concluded OPs No.3 & 4 were negligent and there was deficiency in service on their part. OPs No.1 & 2 were not found liable.

Holding and Implications

Core Ruling: The complaint was partly accepted. OPs No.3 & 4 (HDFC Bank) were held liable for negligence and deficiency in service and were directed to make monetary remedies to the complainant; OPs No.1 & 2 (Syndicate Bank) were held not liable.

Specific directions ordered by the Forum:

  • OPs No.3 & 4 are directed to refund Rs.64,650/- (the amount the Forum found was illegally deducted as "Return Charges") to the complainant, with interest at 12% per annum from the date of filing the complaint (10.07.2017) until realization.
  • OPs No.3 & 4 are directed to pay compensation of Rs.45,000/- to the complainant for mental tension and harassment.
  • OPs No.3 & 4 are directed to pay litigation expenses of Rs.10,000/-.
  • All compliance to be made within one month from receipt of the copy of the order.

Implications:

  • The direct effect is the relief granted to the complainant against HDFC Bank (OPs No.3 & 4) in the form of refund with interest, compensation and costs. The Syndicate Bank (OPs No.1 & 2) was exonerated from liability in this matter.
  • The opinion does not purport to establish a broader legal precedent beyond its application to the facts of the case; the Forum did not indicate that it was setting a novel legal rule. No broader legal implications were specifically discussed in the opinion.

Order compliance note in the opinion: The Forum observed the decision could not be delivered within the stipulated timeframe due to a rush of work and directed the OPs No.3 & 4 to comply within one month of receiving the copy of the order.

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    Surinder Pal S/o Sant Ram v. Syndicate Bank

    BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, JALANDHAR. Complaint No.214 of 2017 Date of Instt. 10.07.2017 Date of Decision: 04.03.2020 Surinder Pal, aged 52 years, S/o Sh. Sant Ram, resident of House No.594, Fauji Wali Gali, Rama Mandi, Jalandhar Cantt. ..........Complainant Versus

    1. Syndicate Bank, Through its Managing Director/Principal Officer, Regd. Office: Door No.16/355 & 16/65-A, Manipal, 576104 UDUPI, (Karnataka).

    2. Syndicate Bank, Through its Manager Sh. Akhil Kumar Bishnoi, Sethi Complex, Rama Mandi, Jalandhar.

    3. HDFC Bank Limited, Through its Managing Director/Principal Officer, Regd. Office: HDFC Bank House, Senapati Bapal Marg, Lower Parel (West) Mumbai-400013.

    4. HDFC Bank Ltd., PAP Complex, G. T. Road, Jalandhar through its Branch Manager, Sh. Manmeet Singh. ... Opposite Parties Complaint Under the Consumer Protection Act. Before: Sh. Karnail Singh (President) Smt. Jyotsna (Member) Present: Sh. Ram Pal, Adv. Counsel for the Complainant. Sh. Ravi Kant, Adv. Counsel for the OPs No.1 & 2. Sh. Y. V. Rishi, Adv. Counsel for the OPs No.3 & 4. Order Karnail Singh (President)

    1. The instant complaint has been filed by the complainant, wherein alleged that he is employed in Punjab Police as Head Constable having No.2 IRB-101, presently posted at Lodhi Kothi, Sangrur. The complainant has taken a loan of Rs.6,90,000/- from Syndicate Bank, Sethi Complex, Rama Mandi, Jalandhar and the monthly installments were fixed at Rs.10,150/-, which the complainant used to deposit with the Syndicate Bank in cash regularly. That unfortunately, the complainant met with an accident and he requested the Syndicate Bank to get the installment deducted from his salary account No.13391050026074 lying with HDFC Bank Ltd., PAP Complex, Jalandhar and the installment of Rs.10,150/- per month was to be deducted from the salary account of the complainant. The complainant was under the bonafide belief that the installment is being deducted from his salary account regularly and is being crediting in the loan account of the complainant lying with Syndicate Bank. But vide letter bearing reference No.8135/NPA/SP/DN01/2016 dated 02.01.2017, the Syndicate Bank served a notice upon the complainant under the SARFAESI Act 2002 on account of non-payment of installments of the loan amount and it was further brought to the notice of the complainant that the account of the complainant has been classified at Non Performing Asset on 29.09.2016. After receiving the said letter dated 02.01.2017, the complainant approached the OP No.2 for confirming the fact about non-deducting of the installments from the salary account of the complainant inspite of the fact that the complainant has already requested the OP No.2 to deduct the installment from the salary account in the Bank of the OP No.4, but the OP No.2 and the other staff of the Branch did not pay any heed to the genuine request of the complainant and did not clarify anything to the complainant for the reasons best known to the OP No.2. The complainant requested for supply of statement of account of his account lying with the OP No.4 and the complainant got shocked to see that the OP No.4 have deducted the entire salary of the complainant amounting to Rs.35,884/- in a single day

    i.e. on 08.02.2017. The complainant requested the OP No.4 to provide the statement of account from the month of October, 2016 till date and from the perusal of the statement of account since October, 2016, it came into the knowledge of the complainant that the Branch of the OP No.4 has been deducting the amount of Rs.862.50/- in single entry since October, 2016 and the said act continued till April, 2017 and the complainant is under the apprehension that the said act is being done by the OP No.4 just to usurp the hard earned money of the complainant and for making illegal financial gains by the OPs. The OP No.4 has deducted the entire salary of the complainant and the complainant is on the verge of starvation due to the illegal acts of the OPs. In the last week of February, 2017 the complainant alongwith his wife and one relative approached the OP No.4 to clarify the fact as to why the entire salary has been deducted by the Bank and as to why the amount is being deducted since October, 2016 without any intimation to the complainant, but the OP No.4 did not pay any heed to the genuine request of the complainant and directed the complainant to visit again on the next day. As per the directions of the OP No.4, the complainant again approached the OP No.4 alongwith his wife for the redressal of his grievances, but instead of clarifying the things to the complainant the OP No.4 abused the complainant and his wife. The complainant suffered a monetary loss on account of illegal act on the part of the OP and due to deducting his entire salary, the entire family of the complainant is on road and on the verge of starvation. The OP No.4 did not provide any justification for deducting the money from the account of the complainant, which is totally illegal in the eyes of law. The total amount of Rs.2,51,188/- has been illegally deducted by the OPs, which is illegal and accordingly, necessity arose to file the present complaint with the prayer that the complaint of the complainant may be accepted and OPs be directed to refund the allegedly charged amount of Rs.2,51,188/- in question alongwith interest @ 12% per annum thereon and further, OPs be directed to pay compensation to the tune of Rs.50,000/- on account of mental agony and harassment suffered by the complainant at the hands of the OPs and further, OPs be directed to pay litigation expenses of Rs.15,000/-.

    2. Notice of the complaint was given to the OPs and accordingly, OPs No.1 and 2 appeared through its counsel and filed a joint written reply, whereby contested the complaint by taking preliminary objections that the instant complaint is not maintainable qua the answering OP because there is no negligence, unfair trade practice or deficiency in service on the part of the OPs No.1 and 2 Bank. The complainant has unnecessary filed the present complaint qua answering OPs, hence the same is liable to be dismissed. It is further alleged that the complainant has no locus-standi to claim any damages or compensation against the answering OP and further submitted that this Forum has no jurisdiction to entertain the present complaint and even the complainant is not a consumer as defined in the Consumer Protection Act and therefore, the complaint of the complainant is liable to be dismissed. On merits, it is admitted that the complainant availed a loan facility of Rs.6,90,000/- from the OP No.2 and the monthly installments were fixed at Rs.10,150/-, but it is wrong that the complainant used to deposit with the OP No.2 installments in cash regularly and further took a plea that as per the request of the complainant, answering respondent had sent the request for ECS transaction to OP No.4, but had never received any installment from OP No.4. As such, the account of the complainant is declared NPA and further submitted that the complainant had never kept the appropriate amount in his account, as such, every time the ECS transaction fails, hence, the complainant was not said to be under the bonafide belief as stated above. The other allegations as made in the complaint are categorically denied and lastly submitted that the complaint of the complainant is without merits, the same may be dismissed.

    3. OPs No.3 and 4 filed its separate joint written reply, whereby contested the complaint by taking preliminary objections that the present complaint is not maintainable because there is neither deficiency nor any negligence of service on the part of the answering OP. It is further averred that the complainant has not approached this Forum with clean hands, rather he has presented a distorted and twisted version of facts and has deliberately withheld true vital facts. The complainant with malafide intentions concocted facts of the case and attributed absolutely false allegations against the OPs and further submitted that the complainant has taken a loan from OPs No.1 and 2 repayable in Equated Monthly Installments (EMI) and authorized OPs No.1 and 2 to recover its dues through ECS transaction from his Bank Account No.133910500260741 maintained with the OPs No.3 and 4 and accordingly, requested to honour the same to the OPs No.3 and 4 and as such, the OPs No.3 and 4 are not liable to complainant in any manner and the present complaint is liable to be dismissed. On merits, it is admitted that the salary account of the complainant is in the answering OP Bank and further submitted that the OPs No.3 and 4 has furnished to complainant his statement of account, as and when asked by him. The ECS charges per transaction is Rs.862.50 and they are debited per transaction and the banks computer system automatically debited the same to concern bank account as and when it is made. It is wrong and denied that the said ECS charges have been made by the OP to usurp the earned money of the complainant and to make illegal financial gains, rather the facts is that the complainant himself is responsible for his own acts or omission and commission. The ECS transactions have been debited absolutely as per his liability. The other allegations as made in the complaint are categorically denied and lastly prayed that the complaint of the complainant is without merits, the same may be dismissed.

    4. Replications not filed.

    5. In order to prove his case, the complainant alongwith his counsel tendered into evidence his own affidavit Ex.CA alongwith some documents Ex.C-1 to Ex.C-10 and further tendered an other affidavit Ex.CW2 and closed the evidence.

    6. Similarly, counsel for the OPs No.1 & 2 tendered into evidence affidavit Ex.OP1&2/A alongwith some documents Ex.O-1 to Ex.O-4 and closed the evidence.

    7. Similarly, counsel for the OPs No.3 & 4 tendered into evidence affidavit of Sh. Sandeep Thapa as Ex.OP3&4/A and then the evidence of the OPs No.3 & 4 was closed by order on 21.11.2018.

    8. We have heard the arguments of learned counsel for the respective parties and also gone through the case file very carefully.

    9. It is not disputed that the complainant availed a loan facility of Rs.6,90,000/- from Syndicate Bank i.e. OPs No.1 and 2 with the undertaking that the said loan will be repaid by way of installments, which were fixed at Rs.10,150/- per month and during the subsistence of that loan account, the complainant met with an accident and he requested the Syndicate Bank i.e. OPs No.1 and 2 to get the installment deducted from his salary account No.13391050026074 lying with the HDFC Bank Ltd., PAP Complex, Jalandhar and the installment of Rs.10,150/- per month is to be deducted from the salary account of the complainant, but as per the version of the complainant, he received a letter dated 02.01.2017 from OPs No.1 and 2 that due to non-payment of installments of the loan amount, your account has been classified as non-performing assets on 29.09.2016 and accordingly, the same was declared NPA by OPs No.1 and 2, vide letter dated 02.01.2017 Ex.C-1 and thereafter, the complainant got a statement from the OPs No.3 and 4 and copy of the same is placed on the file Ex.C-10 and made allegation that the OPs has deducted his entire salary on a one day i.e. 08.02.2017 and also charged excess amount from his account and make a request that the total amount deducted from his salary account i.e. Rs.2,51,188/- be got returned from the OPs with interest alongwith compensation and litigation expenses.

    10. First of all, we have to see whether there is any liability on the part of the OPs No.1 and 2, for that purpose, we have gone through the written reply of OPs No.1 and 2, wherein categorically took a plea that this Forum has no jurisdiction and complaint of the complainant is time barred, but in order to meet out this objection, counsel for the OPs No.1 and 2 miserably failed to make satisfactory reply how this Forum has no jurisdiction and how the complaint is not within limitation. So, accordingly, these objections of the OPs No.1 and 2 are not sustainable in the eyes of law.

    11. Further, in the written statement OPs No.1 and 2 took a specific plea that the complainant had taken a loan of Rs.6,90,000/- from the OP No.2 and the monthly installments were fixed at Rs.10,150/-, but the complainant did not pay the installment regularly, rather ECS transaction of OP No.4/HDFC Bank never transferred any installment amount of the complainant, despite of ECS transaction request of the OPs No.1 and 2, the OPs No.3 and 4/HDFC Bank never transferred any amount qua installment of the complainant. This version of the OPs No.1 and 2 is compared and tally with the statement of account Ex.C-10 of the complainant pertaining to HDFC Bank and find that during October, 2016 to March, 2017, no amount has ever been transferred through ECS and as such, we find that there is no fault on the part of the OPs No.1 and 2, being reason if the complainant is defaulter in the loan amount for a long time, then there is no alternative with the loanee bank to declare the account of the complainant as NPA and accordingly, we hold that there is no liability, negligence and deficiency in service on the part of the OPs No.1 and 2.

    12. So for the concern of OPs No.3 and 4 i.e. HDFC Bank. In this Bank, the complainant has been running his salary account and it is not denied by the OPs No.3 and 4 that the complainant did not give a request for transfer of amount through ECS transaction and moreover, a request to this effect is also available on the file Ex.O-3 and in view of the aforesaid request of transaction of installment amount through ECS, the Syndicate Bank i.e. Loanee Bank of the complainant has right to send request repeatedly for transfer of installment amount and it is the duty of the OPs No.3 and 4 to transfer the amount, if balance is available, but for the best known reason, the OPs No.3 and 4 miserably failed to transfer the amount during November, 2016 to March, 2017, from the salary account of the complainant despite having therein sufficient amount, rather the OPs No.2 and 3 make entry in the statement of account firstly debited the amount, then the same amount credited in the account and this thing happened repeatedly during this period. In order to establish that there is a sufficient amount lying in the salary account of the complainant, we have gone through the statement of account issued by HDFC Bank i.e. OPs No.3 and 4, wherein the salary amount of the complainant was apparently received in the month of October, 2016 and then received salary amount on 03.11.2016 of Rs.38,080/-, then again salary amount received on 02.12.2016 of Rs.28,578/-, then in the month of January i.e. on 02.01.2017 salary amount received of Rs.35,364/-, then again on 02.02.2017 salary amount of the complainant received of Rs.35,884/- and further, the allegations of the complainant that his salary amount of Rs.35,884/- was debited by the OPs No.3 and 4 on a one day i.e. 08.02.2017. This fact is apparently established from the statement of account, the said amount has been debited by the OPs No.3 and 4 in its own account under the pretext Return Charges. We have carefully gone through the statement of account Ex.C-10 and find that despite having sufficient amount to fulfill the installment amount of Rs.10,150/-, the OPs No.3 and 4 repeatedly debited the said amount from the account and then again credited the same in the account and ultimately, the OPs No.3 and 4 deducted the amount from the salary account of the complainant in the name of return charges i.e. in the month of October 14 entries of Rs.862.50/- per entry and then on 03.11.2017 five entries of the same amount and then 09.01.2017 nine entries of the same amount and then on February 2017, 47 entries of the same amount and total entries during the October, 2016 to February, 2017 are 75 entries, whereby OPs No.3 and 4 deducted the amount of Rs.862.50/- per Return Charges. We astonished to see, even not a single transaction was made to the loanee bank of the complainant and despite that why such a huge amount of Rs.64,650/- deducted from the account of the complainant by OPs No.3 and 4 under the pretext of Return Charges, if any transaction is made, then obviously the OPs No.3 and 4 are entitled for transaction charges, but if the transaction is not success, then OPs No.3 and 4 are not entitled. So, the OPs No.3 and 4 has illegally and wrongfully deducted the said amount of Rs.64,650/- by making 75 entries in the statement of account and further, the OPs No.3 and 4 has caused a great financial loss to the complainant by not debiting the installment in the loan account of the complainant in Syndicate Bank i.e. OPs No.1 and 2 and due to this negligence and glaring mistake on the part of the OPs No.3 and 4, the complainant suffered financially, mental agony and he has to pay much interest on the loan amount and his account also went under NPA category. So, ultimately, we reached to conclusion that the OPs No.3 and 4 are negligent and there is a deficiency in service on their part and accordingly, the complainant is entitled for relief from OPs No.3 and 4.

    13. In the light of above detailed discussion, the complaint of the complainant is partly accepted and OPs No.3 and 4 are directed to refund the amount of Rs.64,650/- illegally deducted from the account of the complainant in the name of Return Charges, to the complainant with interest @ 12% per annum from the date of filing complaint i.e. 10.07.2017, till realization and further, OPs No.3 and 4 are directed to pay compensation for causing mental tension and harassment to the complainant, to the tune of Rs.45,000/- and litigation expenses of Rs.10,000/-. The entire compliance be made within one month from the date of receipt of the copy of order. This complaint could not be decided within stipulated time frame due to rush of work.

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    Comments

    Surinder Pal S/o Sant Ram v. Syndicate Bank
    (Mar 4, 2020)